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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.53 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.53 suggests that the company is not a manipulator.

TMO' s Beneish M-Score Range Over the Past 10 Years
Min: -2.98   Max: -0.55
Current: -2.53

-2.98
-0.55

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -0.55. The lowest was -2.98. And the median was -2.46.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0249+0.528 * 1.0002+0.404 * 0.9932+0.892 * 1.0258+0.115 * 1.041
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9409+4.679 * -0.0238-0.327 * 0.9977
=-2.53

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $2,668 Mil.
Revenue was 4294.8 + 4652.5 + 4123.2 + 4270.9 = $17,341 Mil.
Gross Profit was 1957.9 + 2108.3 + 1883.3 + 1941.8 = $7,891 Mil.
Total Current Assets was $6,539 Mil.
Total Assets was $42,953 Mil.
Property, Plant and Equipment(Net PPE) was $2,483 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,688 Mil.
Selling, General & Admin. Expense(SGA) was $4,688 Mil.
Total Current Liabilities was $6,323 Mil.
Long-Term Debt was $11,653 Mil.
Net Income was 402.2 + 602.6 + 476.1 + 511.6 = $1,993 Mil.
Non Operating Income was 0.5 + -13.2 + -1.4 + 3 = $-11 Mil.
Cash Flow from Operations was 289.1 + 1228.1 + 743.9 + 764.9 = $3,026 Mil.
Accounts Receivable was $2,538 Mil.
Revenue was 3918.8 + 4492.8 + 4171.4 + 4321.9 = $16,905 Mil.
Gross Profit was 1822.5 + 2091.9 + 1933.6 + 1846.5 = $7,695 Mil.
Total Current Assets was $6,181 Mil.
Total Assets was $41,857 Mil.
Property, Plant and Equipment(Net PPE) was $2,384 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,736 Mil.
Selling, General & Admin. Expense(SGA) was $4,857 Mil.
Total Current Liabilities was $6,861 Mil.
Long-Term Debt was $10,696 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2668.3 / 17341.4) / (2538 / 16904.9)
=0.15386878 / 0.15013398
=1.0249

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(7694.5 / 16904.9) / (7891.3 / 17341.4)
=0.45516389 / 0.45505553
=1.0002

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (6539 + 2483.1) / 42952.7) / (1 - (6180.5 + 2384.2) / 41857.3)
=0.78995267 / 0.79538336
=0.9932

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=17341.4 / 16904.9
=1.0258

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1735.5 / (1735.5 + 2384.2)) / (1688 / (1688 + 2483.1))
=0.42126854 / 0.40468941
=1.041

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(4687.6 / 17341.4) / (4856.5 / 16904.9)
=0.27031266 / 0.28728357
=0.9409

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((11653 + 6322.8) / 42952.7) / ((10696.2 + 6861) / 41857.3)
=0.41850221 / 0.41945372
=0.9977

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1992.5 - -11.1 - 3026) / 42952.7
=-0.0238

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.53 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Thermo Fisher Scientific Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.72650.4050.94640.99031.00831.10040.93261.02840.98711.0242
GMI 1.09741.05950.97421.00640.96761.00240.96961.00220.95220.9703
AQI 1.2490.99820.95580.99371.01581.02461.00310.83381.24641.0113
SGI 1.442.57051.07710.9631.06721.08691.06691.04641.29021.0045
DEPI 1.89810.43010.97541.03251.05041.03130.94411.00460.88171.0042
SGAI 1.0120.89320.98061.02940.99231.01781.00580.98171.10110.9378
LVGI 0.68750.91340.90881.01291.02271.8861.0061.19181.04250.9249
TATA -0.0113-0.0341-0.0201-0.0365-0.0203-0.0146-0.0315-0.0214-0.0173-0.0202
M-score -1.12-1.77-2.56-2.70-2.52-2.66-2.65-2.64-2.28-2.52

Thermo Fisher Scientific Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.0321.29661.20091.04670.98710.76880.87350.95781.02421.0249
GMI 0.99911.00320.99620.97220.95220.92530.91520.9420.97031.0002
AQI 0.83381.04871.10261.12471.24641.00980.9790.98241.01130.9932
SGI 1.04281.09161.16491.23141.29021.22481.13231.05941.00451.0258
DEPI 1.00461.19681.07890.96230.88170.73420.82690.92891.00421.041
SGAI 0.98341.03441.05651.08741.10111.04521.00480.96470.93780.9409
LVGI 1.19181.35511.28611.27171.04250.93990.94910.94340.92490.9977
TATA -0.0214-0.0058-0.0162-0.0177-0.0173-0.0208-0.0123-0.0139-0.0202-0.0238
M-score -2.64-2.23-2.28-2.39-2.28-2.64-2.59-2.55-2.52-2.53
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